The Company’s mortgage business is actively operating without issue, through the Mortgage America Banker’s operation, which is still headed up Kaptain Koontz in their Kensington, Md offices. These operations represent the sole contact our Financial Services division maintains to the World of Mortgage, Obviously a great departure from years past. The time of our deep involvement into any part of the mortgage business that represents a forward looking risk in any fashion is no longer. We maintain some operations that are solely on a Broker Delivery Basis, in no way is KORE still involved in selling or the packaging of groups of mortgages to sold to Wall Street or any other type of Financial Institutions and this has been the case since mid 2006. Some commercial operations owned and controlled by our CEO Robert Rood were maintained as he saw fit and solely for his benefit under the names Level One Capital Partners, LLC., as well as Blue Horseshoe Capital, LLC., both overseen by his processing arm Blue Horseshoe Portfolio Services, LLC.. Although our residential loans division was known as Level One Mortgage Capital and was also run by Mr. Rood, it was an entity under KORE’s Financial Services Division, First Washington Financial Corporation (“First Washington”), and has nothing to do with Mr. Rood’s entities referenced above.

Our position in Mortgage America Banker’s, LLC., allows us maintain the ability to serve in some ways our long standing mortgage business clients while moving us in completely new direction away from the mortgage business that is spoken about everyday on TV or written about in the paper you read this morning. The mortgage business always represented a volume industry with solid margins and a level of risk that was clearly understood and very manageable, as that changed First Washington departed from all Wholesale and then Retail operations. We have No lingering issues from our near decade of involvement in the mortgage industry and barring the world of what was the mortgage business returning, First Washington will be exploring new opportunities that allow us to achieve what we now miss with the passing of our mortgage pursuits.

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